Standing Committee B

[Part I]

[Mr. Nigel Beard in the Chair]

Enterprise Bill

Amendment proposed [this day], No. 36, in page 132, line 11, leave out 
'to imprisonment for a term not exceeding 5 years or'.
 Question again proposed, That the amendment be made.

Nigel Beard: With this it will be convenient to take the following amendments: No. 90, in page 132, line 12, leave out 'five' and insert 'three'.
 No. 37, in page 132, line 12, leave out 'or to both'. 
 No. 39, in page 132, line 13, leave out 
'to imprisonment for a term not exceeding six months or'.
 No. 40, in page 132, line 14, leave out 'or to both'.

Nigel Waterson: The Under-Secretary assures me that she concluded her remarks, but I seem to remember her quietly subsiding back to her seat. I apologise if I missed some concession in her last few sentences.

Melanie Johnson: I confirm that I made no concession in my last subsiding sentence to the hon. Gentleman.

Nigel Waterson: Why break the habit of a lifetime?
 There are still significant concerns about the provisions, several of which we discussed. My hon. Friend the Member for Huntingdon (Mr. Djanogly) mentioned that there could be an unlimited fine on an individual on indictment. The Under-Secretary did not touch on that in her response, but I assume that that is correct. Hon. Members are nodding. I do not know whether they agree with my summation, or whether she referred to the issue.

Melanie Johnson: The hon. Gentleman is right on both counts: I did not touch on the matter, and the fine is unlimited. I was talking to the hon. Member for Huntingdon about that before the Committee.

Nigel Waterson: I was not privy to that side discussion. The unlimited fine is yet another concern, but we will not make much headway at this juncture. It may be a matter for Report, or for another place. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Nigel Waterson: I beg to move amendment No. 38, in page 132, line 17, leave out from 'Office' to end of line 18.

Nigel Beard: With this it will be convenient to take the following amendments: No. 140, in page 132, line 17, leave out 'or'.
 No. 141, in page 132, line 18, leave out 'by or'. 
 Mr. Waterson: The amendments would all have the same effect, limiting ability to instigate the new criminal offence in clause 179 to the Serious Fraud Squad, and to remove the criminal investigatory powers from the Office of Fair Trading. That was not my idea originally, but the Government's. In their response to the consultation in December 2001, they said that they had decided that the SFO should be the lead prosecutor. We agree with that, and so does the joint committee of the Law Society and the Bar which was good enough to draft the amendments. The Bill does not seem to reflect the Government's statement, as it gives equal power to the OFT and the SFO. It also gives the OFT extensive criminal investigatory powers. Some of the legitimate concerns of business, industry and Opposition Members have already been graphically described.
 The powers of the OFT to investigate company infringements under the Competition Act 1998 are different from the criminal powers under the Bill and from criminal law in general. The rights of defence differ, as do the procedures. It seems to the Opposition, the Law Society and the Bar that giving the OFT both sets of powers will lead to confusion, especially as, in reality, most criminal investigations are likely to stem from an initial investigation under the 1998 Act. Neither is it appropriate that the chairman of the OFT, who has no experience of criminal investigations or prosecutions, should authorise surveillance on application by one of his officials under the Regulation of Investigatory Powers Act 2000. That is why we tabled the amendments, which I commend to the Committee.

Jonathan Djanogly: The concept of fairness and transparency is a paramount consideration in the administration of justice, and relates to the attitude that business and outsiders will have towards the OFT and how it conducts itself. It is undesirable for the OFT to be able initiate proceedings. It is a regressive step. It is some years since the police could decide to initiate prosecution. That was stopped because the system of having one agency carry out the investigation, consider the evidence and then decide to initiate a prosecution proved ineffective. Indeed, it is not used in most parts of the world. It led to unfair prosecutions and a lack of balance. It did not separate the judgment of the two issues concerned. It continually led to prosecutions being initiated on the basis of inadequate evidence. Yet here we are in 2002 proposing to go back to that system in some ways.
 It is no secret that the SFO has had its problems in recent years. It has been discussed in the press and reviews have been ongoing. It has not had a successful conviction record and perhaps that is why the Government now propose that the powers of the OFT should be increased to match those of the SFO. I should be interested to hear the Under-Secretary's opinion on that. If that were the reason, it would be sad in many ways. To my mind, it would lead to less good justice and possibly to a series of human rights claims. 
 On a more mundane basis, such a move is also wrong because the OFT needs the confidence of 
 business if it is to operate effectively. In some ways, we will get so bogged down with the concept of criminalisation and what can be prosecuted that we will not be able to see the wood for the trees. In practice, most companies deal fairly readily with the OFT. They hand over documents freely and have meetings with the OFT, perhaps to describe the marketplace in which they operate for the purposes of a quite separate OFT investigation. They will talk to the OFT about pre-clearances on deals that they are considering. 
 These provisions could affect the whole nature of that relationship. It would be a disaster for the OFT to be seen as a wing of or an alternative to the SFO. Companies might not want to talk to the OFT as they have in the past, or to advise it on markets and so on, unless forced to do so by measures such as these. We have explained why criminalisation is wrong generally, but it is specifically inappropriate in relation to the clause.

Mark Field: I speak only briefly in support of the proposal made by my hon. Friends the Members for Eastbourne (Mr. Waterson) and for Huntingdon. By being given these additional powers, particularly being in tandem with the SFO, there is a risk that the OFT could become a judge and jury. My hon. Friend the Member for Huntingdon rightly pointed out that the ideal role of the OFT would be as an advisory body for companies that might worry that their links and co-operation with other bodies might fall foul of some of this cartel legislation. A company's long-standing practical and commercial relationship with the OFT could be undermined if it found itself subject to an investigation initiated by the OFT. If the powers were in the hands of one body—the SFO—yet the OFT had equivalent powers, it might be seen as somehow trumping the SFO's powers. The measure might then be viewed as particularly serious or of a particular type, which could be dangerous. Does the Under-Secretary know of instances in which the OFT, in preference to the SFO, might initiate such an investigation?

Melanie Johnson: I remarked this morning that the expectation of the Government, the SFO and the OFT is that the SFO will carry out all prosecutions initially. The SFO has the resources and experience of criminal prosecutions of a similar type. For many years, it prosecuted white-collar crime such as insider dealing.
 The hon. Member for Huntingdon asked about the SFO prosecution record. SFO conviction rates, measured against the number of defendants, have risen from an average of 63 per cent. in the first five years of its operation, from 1988 to 1993, to an average of 87 per cent. in the past five years, from 1997 to 2002. That is a good record, giving rise to no concerns on my part of the sort that he expressed. With the figures now in front of him, he may feel reassured. 
 It may be appropriate at some time for the OFT, whose initial role will be as investigator, to take on a prosecutory role. That might happen if the number of 
 cartel prosecutions created a conflict with other SFO priorities, although we do not expect a large number of prosecutions. The OFT would have to develop the necessary capability and resources to take on the role of prosecution. 
 No one will be judge and jury in all this. The OFT will investigate offences and pass suitable cases to the SFO, which will take the lead role in prosecution. The two bodies have already worked extensively on the practical arrangements and a memorandum of understanding is in preparation. There is no question of undermining the OFT's role—it is co-operative working to draw on the strength and expertise of both authorities. 
 If we were not proposing this division of roles, I could envisage members of the Committee asking why we were duplicating existing roles and functions. We have made the right choice: if we had made a different choice, we would face a different line of criticism. Our choice here is cost-effective and draws on the strength of each organisation.

Alistair Carmichael: Will the Under-Secretary explain the Department's thinking on subsection (2)(b)? As presently worded, it states:
''by or with the consent of the OFT.''
 Do the Government intend that the OFT should always be required to give consent? If so, the presence of the word ''or'' at the end of paragraph (a) defeats the object. If not, why would the SFO director require the consent of the OFT, given that his power is absolute under paragraph (a)? I simply do not understand the words 
''or with the consent of''.

Melanie Johnson: Perhaps I can come back to that point in a moment. In Scotland, the Lord Advocate is responsible for prosecutions—I realise that the hon. Gentleman is well aware of that—and he will consider a report from the OFT carefully before taking any decision.
 It was a matter of interest this morning how many Scottish qualified lawyers are employed at the OFT. We do not have the figures and it will take some time to get them, but the hon. Gentleman will agree that the real issue is that the OFT has access to Scottish legal advice—and it certainly does. It has access to the advice of the officers and solicitors of the Advocate-General. A long tradition exists of making such advice available to all UK Government bodies at an early stage. Good communication channels with the Crown Office are also open. The Crown Office can provide the OFT with immediate practitioner advice on Scottish legal matters at any stage of an investigation. 
 The OFT is also a named prosecutor to allow for the possibility that it may be appropriate for it to take on a prosecution role in future. The prior consent provision is necessary to enable the OFT to prevent any prosecution, by a third party, of individuals who have been granted leniency. The reason for the phrase 
''with the consent of the OFT''
 is to allow private prosecutions and to close down other options. 
 I have explained that we envisage a prosecution being brought by the SFO, except in Scotland. Third-party prosecutions may normally be brought for any offence where the legislation does not exclude them. The amendment would restrict the bringing of prosecutions for the cartel offence to the SFO, but I do not believe that there are grounds for doing so. To ensure the proper working of the leniency regime, it is important that a private prosecution can be brought only with the OFT's consent. I have now said quite a lot about the leniency provisions, so I shall not say anything further at this stage.

Alistair Carmichael: I may be missing something blindingly obvious. The Under-Secretary keeps going on about private prosecutions, but I do not see how there could be private prosecutions for these offences, because they may be instituted only under the two options in the provision.

Melanie Johnson: I will come back to that in a moment, if I may. I should like first to deal with the point about scrutiny by surveillance commissioners. The Regulation of Investigatory Powers Act 2000 requires that there be prior approval by a surveillance commissioner. Someone alleged that the decision would be by the OFT, but that would not normally be the case. It would happen only in an urgent case, which I think would be very rare in a cartel investigation. In those circumstances, however, there is a provision in the 2000 Act for the authorising officer—in this case, the OFT chairman, I guess—to issue a notice that grants authorisation and explains the urgency that justifies going ahead. Then the surveillance commissioners, who exist under that Act, would be there to scrutinise immediately after the fact in any event.
 Prior scrutiny is the norm under the provisions. As I have said, I expect matters of urgency to be very rare. Complaints and appeals can be directed to the investigatory powers tribunal set up under the 2000 Act. There are plenty of safeguards. In some circumstances, however, it will be necessary to resort to the measure that I have described. 
 I shall now deal with the meaning of the phrase 
''by or with the consent of the OFT''.
 First, it allows private prosecutions, and secondly, it enables the OFT to close down prosecutions. The point is to permit private prosecutions. I hope that, having heard what I have had to say, Opposition Members will be happy for the amendment to be withdrawn. If not, I urge hon. Members to resist it.

Nigel Waterson: I am content for the moment. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: Before we move on, it is appropriate to say a little more about the clause, if only because we have not discussed subsection (3), for lack of an amendment. Clearly, many issues have been raised about the penalty and prosecution procedures, and I for one am not particularly comfortable with the
 clause. This comes down to the fact that, by attempting to stand tough, we risk hurting the procedures of the courts, undermining human rights and not doing things to the standard that we expect in this country.
 The offence in subsection (3) extends to agreements that are implemented, or intended to be implemented, in the United Kingdom. The exception is for agreements made outside the UK that are not implemented in the UK. If I understand that correctly, two UK companies could plot in Paris to implement an agreement in Germany without being criminals. However, they would be criminals if they missed their train and did their plotting in London instead. I would be grateful for the Under-Secretary's clarification. 
 I understand from the Under-Secretary's comments that the EU Commission has seen the Bill and is happy with it. I would like to know whether it considered the provisions, which would not work in a European-friendly way. What message does it send to foreign companies that our guys can operate cartels abroad, but that anyone operating a cartel here will go to prison? Cartel operations can be blatant, but they can often be complicated, as we discussed. They can also be immensely hard to prove, because what the OFT considers to be a cartel operation may not be seen as such by the companies concerned. If companies discuss international volumes of supply or international prices at a sector conference, at what point does that conversation become price fixing? Under the provisions, a foreign company is eventually likely to decide that it does not like the way things work and will not invest in this country.

Alistair Carmichael: Those remarks prompt me to make a brief observation about subsection (3).
 The Under-Secretary was at pains this morning to emphasise that the essence of the defence is the dishonest agreement. It is curious that in subsection (3) the emphasis is differently put on implementation. I appreciate that that will not be fatal to the creation of the offence or the founding of jurisdiction. However, in the interests of completeness and neatness, some reference to the perfection of the agreement would be appropriate.

Melanie Johnson: Under the offence, prosecutions may be brought for agreements that are implemented, or intended to be implemented, in the UK. That includes agreements that are reached abroad and intended to be implemented in the UK. However, subsection (3) requires that in those circumstances, some subsequent action must have been taken to implement the agreement in the UK. That action could be no more than a clear instruction by telephone or e-mail into the UK to implement the agreement. It would be for the courts to determine whether such action had been taken. Those are the arrangements envisaged in the clause.
 The hon. Member for Huntingdon mentioned other states. We make legislation that impacts on business that is conducted in this country or on matters that relate to this country, so his point would not be relevant to the Bill. It is a bit of a novelty to listen to 
 Conservative Members arguing that we are being insufficiently European in our approach. 
 Question put and agreed to. 
 Clause 181 ordered to stand part of the Bill.

Clause 182 - Extradition

Nigel Waterson: I beg to move amendment No. 92, in page 132, leave out lines 31 and 32.
 This is a fairly short point but it fairly puzzling to say the least. Clause 179 contains the main offence, the so-called cartel offence. Clause 179(1) makes it clear that there must not only be dishonesty but the individual must agree 
''with one or more other persons to make or implement, or to cause to be made or implemented, arrangements of the following kind''.
 The offence clearly involves people coming together and agreeing something. It is not therefore clear what the purpose is of 182(b), 
''conspiracy to commit such an offence''
 and (c), 
''attempt to commit such an offence.''
 The main offence involves agreeing to enter into certain arrangements, as opposed to implementing such arrangements, and so it seems somewhat contradictory. Is it possible under English law to have a conspiracy to agree to enter into something, when the main offence involves agreeing to enter into a cartel? 
 One or two questions at this point may obviate the need for a full stand part debate. How will these arrangements for extradition to this country from overseas interact with the law in the United States? There are reports in all the media today of the outcome of the Sotheby's-Christie's trial in the US. One of the main offenders, Mr. Taubman, is on his way to ''Club Fed'', whereas Sir Anthony Tennant will avoid trial and punishment as long as he does not go the US. Under existing US law, as I understand it, he cannot be extradited for trial for his involvement in antitrust breaches. How will the US authorities view the fact that we will give ourselves the power to extradite people from the US to here, but there is still no power to do the opposite? Is the Under-Secretary aware that the US intends to change its rules to fit in with ours? 
 There has to be an element of give and take about extradition. In the not too distant past countries such as Spain became a haven for British criminals because the extradition laws did not allow them to be extradited back here. Can the Under-Secretary help? She may care to write to us about this. I hope that the point of the amendment is clear: including offences of conspiracy or attempt to commit an offence is unnecessary given the nature of the main offence.

Melanie Johnson: The amendment would remove the possibility of extradition for conspiracy or attempt to commit a cartel offence. The inchoate offences of attempt or conspiracy to commit an offence apply
 automatically by virtue of the Criminal Attempts Act 1981 and the Criminal Law Act 1977. The UK law recognises that conspiring to commit a crime and an attempt to commit a crime are serious and should not be put beyond the reach of the law. Prosecuting such offences is an important aspect of deterring criminals and enables investigatory bodies to step in and prevent the crime from being carried out and harming millions of customers and other businesses.
 For example, if two senior employees of the same company come together to agree a plan to contact other competitors to agree to fix prices, a conspiracy offence has been committed. The UK law recognises the importance of including those offences. We believe that we should not diminish their seriousness by removing from the scope a possible extradition request. We also believe that it is important for international judicial co-operation and combating cross-border crime to allow for extradition, not only for the substantive offence but for the conspiracy to commit and the attempt to commit the offence. That will act as a strong deterrent to criminals and send a strong signal that nobody should escape justice simply by crossing a national border. 
 There are four categories of UK extradition partners: the European convention on extradition partners, Commonwealth partners and Hong Kong bilateral treaty partners where the treaty was signed after 1989 and bilateral treaty partners where the treaty was signed before 1989. With regard to the first three groups of extradition partners, no specific measures are required to be added to new criminal offences such as this one in order to be able to extradite under other provisions of the Extradition Act 1989. 
 In respect of those three groups, the criteria for extradition are that the offence carries a sentence of imprisonment of 12 months or more and dual criminality applies. Both criteria must be satisfied in respect of this offence. Therefore, the proposed amendment would not affect any of these groups of extradition partners. It would not make sense to exclude the offences for the group with whom the UK signed bilateral agreements before 1989, particularly the United States. I therefore hope to persuade Opposition Members to withdraw the amendment. 
 The hon. Member for Eastbourne asked why we need the provision. To commit an offence as defined under clause 179 requires the involvement of at least two different undertakings at the same level of the supply chain. A director who conspires with his sales manager to arrange a cartel to fix prices will be caught under the conspiracy to commit an offence provision in clause 179. We believe that such behaviour should not be beyond the reach of the law where a court could prevent the establishment of a cartel at an early stage. 
 In relation to extradition with the United States, which was a further point of the hon. Gentleman, such requests are not automatic. Automatic extradition requires both states to prosecute an offender for an identical criminal offence. There are some differences between the United Kingdom offence created under 
 the Bill, and the United States offence brought under the Sherman Act. The US offence is not based on dishonesty, therefore a request would need to be reviewed by the UK courts to establish whether the request fulfils the criteria of it being a case where the offence applies in nature to both jurisdictions. Such a review by the courts provides an extra safeguard against automatic extradition, which is ultimately a matter for the courts to decide.

Nigel Waterson: I am grateful for that clarification. Is it the Under-Secretary's understanding that extradition would be automatic if matters were the other way around; if we were requesting extradition for a US or English citizen in the United States to come and be prosecuted here for a clause 179 offence?

Melanie Johnson: I may have to write to the hon. Gentleman on that point.

Nigel Waterson: That leaves me in a slightly unsatisfactory limbo because that last point—

Melanie Johnson: I believe that it works both ways. I can clarify the matter to that degree without taking the trouble to write to him.

Nigel Waterson: I should be grateful if the hon. Lady would write to me in any event so that we are clear about the matter. Occasionally, our deliberations touch on the real world, and at the moment the real world is quite interested in the Christie's-Sotheby's case, which is an instance where there is a stark distinction between the fates of one defendant and one possible defendant. One of them in English and does not intend to leave these shores and go to the USA, so he cannot be extradited to the USA for such an offence under US law. I am keen to return to my original question on the issue, which was whether the Government envisage that there should be reasonably easy extradition between here and the USA. The Under-Secretary has already implied that there could be a procedural step because the dishonesty requirement does not appear in the rather ageing US legislation, but I am keen to pin down how it would work the other way around.

Melanie Johnson: I shall give the hon. Gentleman a little more detail that will put him fully in the picture. It is the case, as I suggested a moment ago, that the US to UK extradition works exactly as the UK to US extradition would work. That is determined by the 1972 treaty. All of the arrangements that I sketched out concerning extradition to the US parallel the terms of extradition back to the UK.

Nigel Waterson: The Minister has already put her finger on one clear distinction—that because there is no dishonesty requirement under the United States equivalent anti-cartel legislation, a US court would feel able to investigate whether there were a prima facie case based on dishonesty. However, I am still a little unclear and, rather than court madness on the matter, I shall await the letter, as should the Minister, to be sure of the precise position.

Melanie Johnson: I am very clear on the precise process. It is exactly the same. If there is an extradition request by the United States, extradition is not automatic because of the slight difference in the
 regimes. They need to be identical for it to be automatic and, as the hon. Gentleman is aware, the United States offence is not based on dishonesty. In the case of an extradition request by the United States, that request will have to be reviewed by the UK courts. If matters are the other way round, they will have to be considered by the United States courts. It is exactly the same, whichever way round one looks at it. I hope that that entirely clarifies the matter for the hon. Gentleman.

Nigel Waterson: It does theoretically but, returning to the practicalities, on what basis, so far as the hon. Lady is aware, could Sir Anthony Tennant not be extradited to stand trial side by side with Mr. Taubman?

Melanie Johnson: I am not sure that I can comment on individual cases but, if that is what the hon. Gentleman is driving at, he did not previously mention a specific case except to say that the matter was interesting in the context of that case. If his question is specific, I can look at whether there is an answer to it but I would not want to attempt that answer thinking on my feet at this moment.

Nigel Waterson: I do not think that we can take the matter much further forward, but it helps to examine a particular case when looking at how something will work in practice, and fate landed one in our laps only this morning. Most newspapers rather baldly say that it was not possible to extradite Sir Anthony Tennant to face trial. That might just be journalistic over-simplification. There might be perfectly good procedural or evidential reasons why Sir Anthony Tennant has quite rightly not been troubled at all. However, I cannot help but feel that, in the longer run, the United States authorities are bound to take a dim view of us trying to extradite their residents or citizens to face anti-cartel charges here when they are having difficulties extraditing people resident in this country to the USA, especially in such a high-profile case.

Melanie Johnson: There is no possibility of that at this moment because the matter is not defined as criminality at this point. There is no regime that covers it. Were this Bill enacted, my understanding is that Sir Anthony Tennant probably could have been extradited. Again, I hope that that clarifies the hon. Gentleman's understanding.

Nigel Waterson: Sadly, it makes me more confused. I was under the impression that clause 182 deals with the extradition of people from other countries to this country to face trial here. Is the Minister saying that it deals with the opposite situation, in which residents or citizens of this country can be extradited to face trial in foreign courts? I cannot believe that that is possible, but if it is indeed what the clause means, I would be fascinated to hear it. In any event—

Melanie Johnson: I am not sure whether I can help the hon. Gentleman. I do not seem to be succeeding in helping him here, so it might be better for me to write to him. My understanding is that extradition requests are based on the nature of the legal and criminal regimes in the two countries party to the arrangement. We are dealing here with extradition to other
 countries, but that will not assist in terms of extradition to the United States specifically.

Nigel Waterson: Perhaps I am beyond help on the issue. I had better read Hansard carefully when it comes out and if a letter is in the offing, that will be very helpful. The Minister has been trying very hard to be helpful on the matter and, on that basis, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of the debate on the amendment proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill. 
 Question agreed to. 
 Clause 182 ordered to stand part of the Bill.

Clause 183 - Investigation of offences under section 179

Jonathan Djanogly: I beg to move amendment No. 94, in page 132, line 41, at end insert—
''insofar as relevant to the investigation of the offence under section 179 which it is suspected has been committed''.
 The fundamental effect of clause 183 is to provide the OFT with the same powers that the SFO currently has under the Criminal Justice Act. Again, the Government seem to be introducing provisions—although the Under-Secretary will deny this—that have the implication of undermining the SFO and that undermine the OFT in the process. In the context of our earlier debate on initiating proceedings, I mentioned the potential problems, in relation to the powers of the OFT and SFO, for the transparency and reputation of this country's courts. 
 We have no less of a problem over giving the OFT new powers of investigation. Those powers could significantly undermine the business community's confidence in the OFT, which is currently based on its understanding that the OFT is part of a system that ensures fair trade, rather than being, conceptually, a criminal agency. In any event, the amendment is appropriate in that any investigation undertaken should be relevant only to the suspected criminal infringements of clause 159. 
 I heard the Under-Secretary say earlier that the Government do not immediately intend to turn the OFT into a prosecution agency, but that is the clear purpose of this legislation. If that is to happen, we must look at the matter in a different light from that in which we have in the past. The amendment might give some small comfort to companies that an anti-cartel investigation mounted by the OFT will not be used as some kind of general fishing expedition.

Alistair Carmichael: I support wholeheartedly the amendment that the hon. Member for Huntingdon has proposed. At the moment, I am seriously concerned that clause 183(2) as currently worded will be a licence for fishing expeditions. One always
 remembers, of course, that Al Capone was caught for his tax evasion and one can imagine that some minor offence might be the basis on which the OFT goes into a company and that, once there, it will run amok. There must be proper and meaningful controls over that in the Bill, and the amendment would achieve that.

Melanie Johnson: I think that there is some misunderstanding about what the amendment would achieve. I hope to persuade Opposition Members not only that they should support anything that brought Al Capone to justice—if there has been an implication of anything different—but that the amendment is unnecessary and superfluous. It seeks to limit the circumstances in which the OFT can use its powers of criminal investigation to investigate suspected cartel offences, in order to ensure that the OFT uses its tough new investigatory powers only in appropriate circumstances. We believe that that is a fit and proper safeguard and have already included an adequate provision to that effect.
 Subsection (2) states that the criminal investigatory powers are exercisable 
''only for the purposes of an investigation under subsection (1)''.
 Under subsection (1), the OFT may only 
''conduct an investigation if there are reasonable grounds for suspecting that''
 the cartel offence ''has been committed''. I entirely sympathise with the points that the hon. Members for Huntingdon and for Orkney and Shetland (Mr. Carmichael) made, but I believe that the amendment is otiose.

Mark Field: When the Under-Secretary referred to clause 183, she said that the OFT may conduct an investigation only if there are reasonable grounds. That is not what subsection (1) says. It gives far broader discretionary power and does not confine the OFT's power in the manner that she says it does. It gives almost carte blanche discretion, provided that there are reasonable grounds. The word ''only'' does not appear in subsection (1) at all.

Melanie Johnson: Subsection (2) in my copy of the Bill says:
''The powers of the OFT under sections 184 and 185 are exercisable, but only for the purposes of an investigation under subsection (1)''.
 The word ''only'' does appear.

Mark Field: The hon. Lady is right that subsection (2) is contingent upon subsection (1), but subsection (1) gives a very wide discretion. The word ''only'' does not appear in it.

Melanie Johnson: I can read what subsection (1) says, as anyone can. It says:
''if there are reasonable grounds for suspecting that an offence under section 179 has been committed.''
 It is specific and, in turn, refers to section 179 and the offence that we are talking about. There is a direct link. 
 I assure the hon. Gentleman that the Government's intention in the matter is exactly the same as his. There 
 is no difference. If for some reason the lawyers believe that the Opposition have raised further points, I shall certainly reconsider the clause. However, I believe that the amendment is superfluous and that the clause addresses the matter just as the hon. Gentleman and the Government would like.

Jonathan Djanogly: I hope that the Government have realised that there is a problem with the wording, in so far as it would certainly be better if the word ''only'' were put in as the fourth word in subsection (1). To the extent that the Under-Secretary has said that the intent is that it will apply only in respect of section 179, I am pleased and, on that basis, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendment proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill. 
 Question agreed to. 
 Clause 183 ordered to stand part of the Bill.

Clause 184 - Powers when conducting an investigation

Nigel Waterson: I beg to move amendment No. 96, in page 133, line 2, leave out
'or any other person who it has reason to believe has relevant information',
 and insert— 
'past and present employees of the business of which the person under investigation is an officer or employee'.

Nigel Beard: With this it will be convenient to take the following amendments: No. 97, in page 133, line 17, at end insert—
'(5) A notice under subsection (1) must indicate the subject matter and purpose of the investigation'.
 No. 98, in page 133, line 17, at end insert— 
'(6) Any person of whom information is sought pursuant to this section shall not be required to provide such information, if the provision of that information would infringe the right to silence and/or the right against self-incrimination'.
 No. 99, in page 133, line 17, at end insert— 
'(7) Any person of whom information is sought pursuant to this section shall be entitled to have a lawyer of his choice present at all times throughout the investigation, and the OFT shall be required to advise'.
 No. 101, in clause 185, page 134, line 9, at end insert— 
'(3A) Any person of whom information is sought pursuant to this section shall not be required to provide such information, if the provision of that information would infringe the right to silence and/or the right against self-incrimination.'.
 No. 103, in page 134, line 9, at end insert— 
'(3C) Any person of whom information is sought pursuant to this section shall be entitled to have a lawyer of his choice present at all times throughout the investigation, and the OFT shall be required to advise.'.
 No. 105, in clause 186, page 134, line 30, at end insert— 
'(4) Any person of whom information is sought pursuant to this section shall not be required to provide such information, if the provision of that information would infringe the right to silence and/or the right against self-incrimination.'.
 No. 106, in page 134, line 30, at end insert— 
'(5) Any person of whom information is sought pursuant to this section shall be entitled to have a lawyer of his choice present at all times throughout the investigation, and the OFT shall be required to advise.'.

Nigel Waterson: On any view, clause 184 and the following clauses contain some wide powers for the OFT. If members of the Committee have any role in life, it is to ensure that the powers are limited, clear and transparent and that they cannot be misused once the Bill becomes law. The amendments on clauses 184 and 185, grouped together, are designed to do just that.
 We think that the current wording of clause 184 is too broad, as does the CBI, and could lead to individuals not actually related to the company using the offence and a potential investigation in a malicious or vexatious way. The requirement should be limited to past and present employees of the company. Indeed, that is precisely the group of people who are most likely to be involved in the investigations: people who are currently working for the company or previous employees, either in the role of providing information on behalf of the company or in the role of whistleblowers. It seems to us eminently fair and sensible that the power be limited in that way. 
 Amendment No. 97 makes it clear that the notice given under the clause must be specific. It must indicate the subject matter and purpose of the investigation. That is a question of fairness and due process. There has already been a concern expressed on the Opposition side of the Committee about potential fishing expeditions. We have seen investigations in the past where people in situ, as part of a dawn raid or whatever, grabbed everything in sight—computers, files or anything they could lay their hands on—only to have arguments later on about whether that was in the terms of the warrant that formed the basis of the investigation. The notice should be explicitly required to state the subject matter and purpose of the investigation. We cannot allow law-abiding businesses to find themselves investigated, raided or disrupted by people trying to find evidence on which to base an investigation, who have no prima facie reasons that they can set out in the notice for that investigation. 
 Amendment No. 98 is eminently fair; it would explicitly recognise the right to silence and the right against self-incrimination, with a requirement on the OFT to advise persons being investigated of their rights in that respect. That is another example of how the OFT investigations can and should be made more difficult—as long as the Minister is intent on bringing such draconian criminal sanctions. It is as simple as that. It is a question of fairness and following the same procedures as if people were being investigated for some existing criminal offence. There should be no infringement of the right to silence or the right against self-incrimination. 
 We have already raised the issue of human rights legislation at least once. I cannot for the life of me understand how the Secretary of State feels able to declare that the Bill does not contravene the human rights legislation. There are substantial arguments involved; once investigations start revving up, and high-grade lawyers are instructed by those being investigated, we will see the arguments being deployed. Matrix chambers and others will be wheeled out to develop the arguments at length, and at great expense. We may as well have it out now rather than later. 
 Amendment No. 99 puts down a perfectly clear requirement, in the context of alleged criminality, that any person should be entitled to have a lawyer of his choice present throughout the investigation, and that the OFT should advise people of their rights in that respect. I would have hoped that I did not need to develop that argument at any length. It seems axiomatic that it is the sort of right available to suspects in any criminal situation. It is the Government's decision to turn the matter into a criminal one. Therefore, they must accept all that goes with a criminal investigation.

Tony McWalter: I hope that the hon. Gentleman does elaborate the point a little more because I fail entirely to understand his reasoning. At the moment, I am dealing with a case where a large number of people have alleged that a company is unfit to trade on a wide variety of matters, most of the evidence for which comes from customers and others who have been—one is tempted to say—the victims of its activity. Although there is corroborating evidence from employees—to cite amendment No. 96—it would not be of much use without other evidence from those who are not employees. Equally, I think similar activities, and amendment No. 99, would have the effect of frightening off people from allowing their perception of what has happened to have any real effective airing.

Nigel Waterson: I am grateful for that intervention, but I cannot be as helpful as I would wish in response as I do not know on what basis the company was said to be unfit to trade.
 We must be careful about allowing the cartel offence, which will be a serious offence with major criminal sanctions attached, to be misused to attack a company for which other remedies are already available. It may be that the company is unfit to trade because its goods are not merchantable or they never appear, or that it is overcharging for them or using abusive selling methods. Is the hon. Gentleman saying that unless there is prima facie evidence of that company being involved in a cartel—I am happy to give way if the hon. Gentleman can confirm or deny that—

Tony McWalter: Just to clarify, yes I am saying that.

Nigel Waterson: Then I would have thought that once the OFT has the prima facie information that a cartel offence has taken place, it is perfectly possible to fit our amendment into the clause for the subsequent
 investigation. Our drafting would not necessarily obviate past or present employers from blowing the whistle in the first place, but I am happy to reconsider that.
 In amendments Nos. 101, 102 and 105, we are talking about the provision of the right to silence, the right against self-incrimination and the obligation on the OFT to advise people, who are being investigated, of their rights. Amendments Nos. 103 and 106 refer to the entitlement to have a lawyer present. None of the amendments would do anything that would solidly fix the clause into criminal law and procedure. It is up to the Government to accept the proposition for which we have been arguing for what seems like most of our lives but has in fact been only a few hours: it is distracting and ineffective to introduce criminal sanctions. 
 During the stand part debate on clause 179, I said that one problem is that if one raises the ante by increasing the burden of proof and introducing criminal sanctions, many things will follow. The amendments are perfect examples of that. The Under-Secretary has an uphill task in arguing against them, because they are absolutely what is required under English criminal law and, I suspect, Scottish law. She has a difficult task in arguing that what the amendments cover should not be available in a given situation. What would be the reason for it? People can still end up in prison. Someone who has stolen a car and someone who has been convicted of a telephone theft could still share a cell in the same prison—perhaps they would not be in the same prison, but they would still be in prison, and would be entitled to all the defences, burdens of proof and everything else. That applies as much to someone who is alleged to have stolen a car as to someone who is alleged to have murdered somebody. It is therefore absolutely essential to include safeguards. I would be amazed if the Government disagree.

Tony McWalter: I must not have made my point sufficiently clearly to the hon. Gentleman, so I rise to consolidate the point more accurately.
 I simply do not agree that, during an investigation under any other aspect of criminal law, lawyers are present throughout. That is clearly not the case. Police conduct investigations by sifting witnesses and taking statements from people who allege certain things. Out of that, comes a prosecution case, at which point lawyers become involved. To have lawyers present throughout the investigation would, I repeat, intimidate some people who may have valuable things to contribute. They might be talked out of vouchsafing information if lawyers were always present. In that light, I hope that the hon. Gentleman will reflect that the amendments would not do what he thinks they would.

Alistair Carmichael: I am for the main part content to support the bulk of the amendments. However, one that gives me cause for pause is No. 96. It appears to be overly restrictive in terms of the class of people that it would cover. As I understand it, it would not allow the OFT, for example, to question an employee of a business other than the business with which the person under investigation was associated. It is of the essence
 that there have to be two parties to such an agreement, and it would be sensible to allow the OFT to question employees of both businesses in relation to the person under investigation.

Nigel Waterson: I should have thought it axiomatic in cartel investigations that it would take two to tango, and at least two companies would probably be investigated. With respect, the practical problem suggested by the hon. Gentleman would not arise because both companies, or perhaps a range of companies, would be under investigation. To take the example of bus companies, both of them would be under investigation and there would be no bar on talking to all their past and present employees.

Alistair Carmichael: That would probably be the case, but one can envisage scenarios in which it would not necessarily be the case. Indeed, the hon. Gentleman's proposed wording would restrict the investigation to a point beyond which it could not be the case, which would be undesirable. I share his concerns, however, about self-incrimination and the right to silence, and from that point of view the rest of his arguments are entirely sensible.
 Amendment No. 97 seems to be an entirely sensible suggestion. It would make the scope of both the documents recovered and the investigation conducted at the time much clearer when they came to be examined in court. Whether evidence recovered is admissible in court would also be easily identifiable because it would have been recovered in a fair and transparent way. 
 Amendments Nos. 98 and 99 are also sensible. I cannot see how we can possibly hope to have legislation that is human rights-proof without a provision such as amendment No. 98. If it is not accepted, will the Under-Secretary tell us whether a person under investigation could acceptably answer a question by simply saying, ''No comment''? We have to be told about that before we can be persuaded that such an amendment is not necessary. 
 On amendment No. 99, access to legal advice and counsel throughout the course of any interview or disclosure process seems to be very sensible. With respect to the hon. Member for Hemel Hempstead (Mr. McWalter), that is not that alien to current criminal procedures. My understanding is that in England one's entitlement to access to legal advice at the point of questioning is quite strong. Since the implementation of the Scotland Act 1998 and the Human Rights Act in Scotland, there has been greater access to legal advice when, for example, people are questioned in a police station. I should have thought that that is exactly the sort of thing that the Government would have wanted to see in the Bill. At the moment, I find myself in a kind of bizarre wonderland—

Nigel Waterson: Yes, you are a Liberal Democrat.

Alistair Carmichael: Indeed. The hon. Gentleman has noticed: how very perceptive of him. I find myself opposing the Labour Government and supporting the
 Conservatives on a point about human rights and civil liberties.

Tony McWalter: The hon. Gentleman says that one should be entitled to a lawyer throughout questioning, and I am perfectly happy with that. However, amendment No. 99 states that one should be entitled to have a lawyer present ''throughout the investigation''. An awful lot of investigating takes place before people arrive at the stage of being questioned.

Alistair Carmichael: That is a fair point. The amendment, however imperfectly framed, would give an entitlement that is not in the Bill at present, and that is, I think, very important. The final phrase of amendment No. 99, that
''the OFT shall be required to advise'',
 provides something akin to a caution prior to questioning. There is nothing in the Bill that approximates to that. 
 It appears to me that the Government should take the clause away and examine it carefully, looking at how properly human rights-proof it could be. I am not up to speed on the full, most up-to-date case law on self-incriminations, subsequent to the Human Rights Act, but it is not that long since the giving of information under section 172 of the Road Traffic Act 1988—which requires a person suspected of driving a car at the relevant place and time to state whether he or she was the driver, and if not, who he or she believed the driver to be—was held to be incompatible with Scots law. That was subsequently overturned by the Privy Council, but my understanding and recollection—the Under-Secretary's advisers will have better knowledge of this—is that that was done on a narrow administrative basis. What we are talking about here concerns the fullest powers of investigation and could not in any sense be described as a narrow administrative point.

Mark Field: I have a couple of minor points to make, although I must confess that I do not share the encyclopaedic knowledge of Scots law that the hon. Gentleman has.

Alistair Carmichael: The hon. Gentleman should count himself lucky.

Mark Field: I suspect that I can indeed count myself lucky in that regard, especially on St. George's day, when we should all be proud.
 I accept that, under clause 187, we shall discuss one or two safeguards that have been put into place for would-be defendants in this regard, and I understand the Government's desire to make clause 184 work. Clearly, we want to avoid the risk of documentary evidence being shredded, or the tipping off of individuals in advance of an OFT inquiry. I understand that some aspects of the clause give the OFT powers in that regard.

Nigel Waterson: Does my hon. Friend agree that all the problems that we are discussing would fall away if the Bill did not include criminal sanctions for the cartel offence in clause 179? None of these problems would arise were that simply a civil matter.
 Mr. Field: That is of course entirely true, but sadly the votes on clause 179 have been lost so we must move ahead on the basis that there will be criminal sanctions, which have such commensurate and contingent problems.
 It seems sensible to include certain safeguards in the Bill. Even if the Under-Secretary assures us that the powers currently in clause 184 will not be exercised in the draconian way that several Opposition Members have painted, I have great concerns about those powers. It would make sense to have safeguards, and those suggested in the amendments are only right and sensible, given the increasing importance of human rights legislation in the UK and from Europe.

John Pugh: I should like to comment generally and then on the specific amendments, Nos. 96 and 97. There is a general concern that liability in the Bill as drafted is fairly vague but that penalties are highly specific. There is the possibility of serious criminal offences, but not the availability of the normal defences for people charged with them. Although the amendments might swing too far in the other direction in some respects, which was the point made by the hon. Member for Hemel Hempstead, there is real concern and a necessity for the Minister to respond to that in some way.
 I slightly disagree with my hon. Friend the Member for Orkney and Shetland on amendments Nos. 96 and 97. He found fault in the revision, but I think that there is scope for revision. My concern is that the phrase ''or any other person'' is far too vague. That ''any other person'' may well be a supplier. According to clause 192, if people do not co-operate they run the risk of six months in jail. 
 Rather more disturbingly, if that ''any other person'' recklessly makes a false statement, they run the risk of two years in jail. There probably is not a person in the Room who has not at some time recklessly made a false statement. The clause says not ''knowingly'' but ''recklessly''. I wonder whether all those people investigated, who may not be the people directly in the frame, would be aware of that. We are reaching a point where it may not be simply a case of warning people being charged that anything may be taken down in evidence and used against them, but also anyone who appears as a witness in that context. 
 My second concern regarding amendment No. 97 takes issue with the vagueness of the demands for documentation. The clause says: 
''to produce, at a specified place and either at a specified time or forthwith, specified documents, or documents of a specified description, which appear to the OFT to relate to any matter relevant to the investigation.''
 I am not concerned about the OFT asking for details and information that would be kept normally and demanded by company law, VAT inspectors and so on. However, if it is left completely open, there might be someone—perhaps through non-culpable carelessness—who loses a document that the OFT has demanded. People under investigation may not have a document, or may have disposed of it quite 
 innocently because they might not be very sophisticated. 
 If a document is not available for whatever reason, subsection (4) states that the person who does not have the document must explain where it is. Of course, the implication would be that they had lost, or worse still, destroyed the document. Later elements of the legislation state that they must prove that they have not destroyed the document. Those concerns make the case for tightening the clause so that the people in the frame are those who deliberately and malevolently form cartels on an anti-competitive basis. People who have simply been less than adequate book-keepers should not get caught in the net.

Jonathan Djanogly: The hon. Gentleman suggested that he did not know anyone who had not made a reckless statement. Was he referring to hon. Members' election addresses?

John Pugh: Certainly not.

Jonathan Djanogly: I wonder whether breaches of party manifestos will come within the scope of the new consumer law.
 It is easy to assume that the legislation will just get the bad guys, but the reality is that when the OFT mounts an investigation, for every person from whom it obtains information, it will see a dozen who have had nothing to do with the cartel. Even if they did, they were probably involved in a company operating a cartel without their knowledge. The vast majority of people will be innocent of any crime.

Ken Purchase: Has the hon. Gentleman heard the phrase, ''We are trying to eliminate people from our inquiry''? That is a time-honoured way of going about such matters. We sometimes need to see people in all sorts of circumstances, simply to eliminate them from the inquiry. He speaks as if there is no body of experience or law that already covers much of the investigative process that we are debating. It is essentially about protecting those who may not be involved.
 It is reasonable that we should get on with it. The clause is a very important part of the Bill, we need it, and I think that we are getting some obfuscation from Opposition Members.

Jonathan Djanogly: I resent that last remark. It was an outrageous thing to say in the context of a debate on the rights of people who are subject to investigation. I have not heard anything in the debate so far that one could call obfuscation.
 However, the hon. Member for Wolverhampton, North-East (Mr. Purchase) has a point, which he did not specifically express. Amendment No. 96 is different from the others, as hon. Members have said. It deals with who can actually be investigated, whereas the other amendments deal with what happens when someone is investigated. That is an important point, because the issues are very different. To that extent, I believe that the grouping of the amendments was probably slightly confused. 
 I have been speaking about innocent people who are caught up in an investigation. I have seen that at first-hand, and it is distressing, even for people have nothing to fear because they are not guilty. Everyone has rights—even those who are guilty—throughout the investigation, and the hon. Gentleman must appreciate that important point. I shall stop there, but I certainly support the amendments.

Melanie Johnson: Frankly, the group of amendments is something of a curate's egg. I hope to explain to Opposition Members why I believe that. I hope also to persuade them that perhaps they have been making somewhat heavy weather of some of the issues, although I agree that there are some important considerations.
 Amendment No. 96 would restrict the power to past and present employees of the business under investigation. We believe that such a restriction would place far too serious a limit on an investigation. It is not clear why Opposition Members think that it would be such a good idea. As some hon. Members have pointed out, the information that is relevant to the investigation may be held by undertakings or individuals who are not, and never have been, connected to the business of the person under investigation. Such a restriction could also lead to difficult questions as to who constitutes an employee or an ex-employee of a relevant business. For example, are agency staff or contractors to be included in the definition? For those reasons, such a restriction would make effective investigation very difficult.

John Pugh: , I accept the Under-Secretary's point. However, if some of those marginal people are interviewed by the OFT, they are subject to the same severity of punishment as anyone else if they make a false or inadvertently false statement. Is there a procedure whereby they might be warned of the significance of what they are saying? They may have had only a temporary connection with the company concerned.

Melanie Johnson: Perhaps I can come back to that point in a moment.
 The OFT needs the freedom to pursue any investigation in the most effective way. It should not be restricted from the outset with regard to those whom it may ask to produce relevant information or to answer questions relevant to the investigation. I understand that the hon. Gentleman is interested in the situation of people who are drawn into the investigation to provide information that is or might be relevant.

Tony McWalter: Does my hon. Friend agree that amendment No. 96 would mean that if a cartel were being set up in a smoke-filled saloon bar between A and B, and somebody overheard the conversation, the OFT would not be allowed to implicate them in the investigation into the cartel?

Melanie Johnson: Indeed. That would almost certainly be the case. I urge the Committee to resist the amendment. It is not at all helpful as it would make investigations much more difficult.
 Amendment No. 97 is designed to add a requirement for the OFT, when investigating under a written notice, to indicate with that notice the subject matter and purpose of the investigation. It would add a safeguard providing any person under investigation with certainty of the grounds on which they are being investigated. The OFT is already required to state the purpose and subject matter of a investigation on any notice it issues under its powers to investigate civil offences. We welcome the extra safeguard and agree to consider how most appropriately to add it to the provisions. If, when the time comes, the amendment is withdrawn, I will undertake to consider the matter further and how to proceed in the most appropriate manner. 
 Amendments Nos. 98, 99, 101, 103, 105 and 106 are designed to provide the right to silence, the right against self-incrimination and the right to legal representation to persons being investigated for the cartel offence. Such safeguards are indeed proper and necessary where evidence given by someone under investigation may later be used as evidence in court against them. OFT officers investigating a criminal offence will have regard to the codes of practice for criminal investigations in England and Wales, as provided in the Police and Criminal Evidence Act 1984. I will talk about the position in Scotland in a moment. 
 Section 67(9) of PACE states: 
''Persons other than police officers who are charged with the duty of investigating offences or charging offenders shall in the discharge of that duty have regard to any relevant provision of such a code.''
 OFT and SFO investigators are 
''persons other than police officers''
 for the purposes of undertaking criminal investigations. The purpose of PACE is to protect suspects where investigators are trying to obtain evidence that can be used against them. 
 Where OFT investigators are seeking voluntary statements from those under investigation, they will be subject not only to the safeguards that the amendments are designed to introduce but to all the other requirements of PACE such those governing the granting of breaks, embassy access and the meeting of religious needs.

Jonathan Djanogly: Would it be necessary for the person being questioned to be read their rights at the time at which the investigation started, rather than some later time?

Melanie Johnson: I am assuming that any investigation would have to be conducted according to the codes of practice for criminal investigations, just as any other similar investigation would—that is under the voluntary arrangements, when information is given voluntarily. Where OFT investigators seek information under compulsion using the powers conferred by clauses 184 to 186, PACE does not apply.
 However, clause 188 does provide protection against self-incrimination. In other words, any information obtained under compulsion cannot be used against the person who made it in court, except in very limited circumstances. That safeguard mirrors 
 that provided to persons subject to a fraud investigation using powers conferred on the SFO by section 2 of the Criminal Justice Act 1987. 
 A suspect has no right to have a lawyer present when being interviewed under compulsory powers. However, in the interests of fairness and unless it would unduly delay or obstruct the investigation, the SFO would advise persons under investigation that they might wish to seek legal representation, and the OFT will follow SFO practice in that respect. I hope that that explains the situation for England and Wales. 
 In the case of suspects being cautioned in Scotland, PACE does not apply. When the OFT is seeking voluntary statements from suspects in Scotland, it will nevertheless give a caution in line with normal practice under Scots common law. Omitting to give a common-law caution before questioning a suspect would place the admissibility of the evidence in doubt. As I said earlier, the Crown Office will be providing training in Scots law and practice to OFT investigators. When the OFT is seeking information from suspects in Scotland using its compulsory powers, clause 188 will have effect. As I explained a moment ago, that clause restricts the use to which the information provided under compulsion can be put in court.

Alistair Carmichael: The provisions as they stand seem to make it particularly difficult for the prosecution rather than for the defence. We accept that questions can be asked during an investigation of someone who, it subsequently becomes apparent, should be charged but it is quite inconceivable that, if powers of compulsion have been used, they cannot—or so the Minister tells us. I suggest that there might be some merit in the Law Society of Scotland's briefing, which suggests that there should be a measure of prior judicial oversight to protect the position of all parties in that respect.

Melanie Johnson: As I have said before, the powers of investigation conferred on the OFT under the Bill are entirely necessary and proportionate for the detection and successful prosecution of offences. The hon. Gentleman is making a point. I had hoped to persuade him that we were in entirely the right place; I seem to have persuaded him that we are in the wrong place but for a different reason. I take it that he will not support the amendments on that basis. The powers include the power to require information under notice without the requirement for judicial approval. Those powers are not unique; other enforcement agencies use them in the investigation of similarly serious crime. Indeed, the powers in the Bill have been modelled on the powers conferred on the SFO in the Criminal Justice Act 1987. I have no reason to believe anything other than that they are entirely compatible with the European convention on human rights.
 I am sure that the hon. Member for Orkney and Shetland is well aware that there is no absolute right to a solicitor in Scotland. However, Scottish case law has established the principle that if a suspect asks for a solicitor and the investigating officer refuses the request, the refusal can be used as evidence in determining whether the interview was fair. In 
 practice, the OFT would offer a suspect under Scottish jurisdiction access to legal representation whether or not it was seeking voluntary statements that could be used as evidence against that suspect. For those reasons, I shall take away amendment No. 97 and consider the matter further, but I hope that I have persuaded the hon. Gentleman that he should withdraw the amendment.

Nigel Waterson: I am most grateful to the Minister for her careful explanation. With the possible exception of amendment No. 96, we are extremely wedded to the principles set out in the amendments. We shall read carefully what she had to say. On such things as the right to silence, self-incrimination and legal representation, we want to be absolutely clear that, in this sort of investigation, an accused or a potential accused will have the same rights as any other person under suspicion under any other circumstances. The Minister has gone some way to reassuring us on that, but we shall be taking advice on specific points.
 I want to be absolutely clear that, as the Bill stands, evidence that is obtained without those safeguards will be regarded as tainted, that it would never come to a full investigation or that it would be struck out later because the evidence had been obtained without following those procedures, as would be the case in other criminal matters. There should be no difference whatever between the procedures followed to protect the accused in this case and those followed under any other sort of criminal prosecution. We shall reconsider the point. We are grateful to the Minister and we shall seek detailed advice on everything that she has said. If she would like to send us anything to reinforce what she has said, that will be welcome. On that basis, I am happy to withdraw the amendment.

Melanie Johnson: Let me just confirm, to reassure the hon. Gentleman, that I see that there is no difference.

Nigel Waterson: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 184 ordered to stand part of the Bill.

Clause 185 - Power to enter premises under a warrant

Question proposed, That the clause stand part of the Bill.

Alistair Carmichael: I have a few concerns about the clause, and I return unapologetically to the point that I made on Second Reading. I draw the Committee's attention to clause 185(5)(b), which defines ''Court'' in Scotland as the High Court of Justiciary. It seems bizarre that only the High Court of Justiciary is to issue a warrant in Scotland. Is the wording of the clause influenced by the fact that the High Court in England and Wales and the High Court in Northern Ireland are to be given the power to grant warrants? I understand from my consultants in English criminal law and procedure, the hon. Members for Huntingdon and for Cities of London and Westminster (Mr. Field), that the High Court in England is a court of civil
 jurisdiction. The High Court of Justiciary is clearly a different sort of beast; it is an exclusively criminal jurisdiction.
 As the normal procedure in the investigation of all offences is to give the power to seek a warrant to the procurator fiscal, who then goes to the sheriff court to obtain a warrant for investigation, at the very least I should think it appropriate for the warrant to be obtained from the sheriff court as well as the High Court. Given that there are some 22 senators of the College of Justice—judges in the High Court in Scotland—there is no need to burden them in the way proposed. I do not see why, either, the procurator fiscal should not be given the power to seek the warrant. I cannot think of another instance, with the possible exception of a few customs and excise offences, in which the procurator fiscal is not given the power to seek a warrant. I should be grateful if the Under-Secretary explained why the clause is so worded. It serves to reinforce my suspicion that the drafting of the Bill does not take sufficient account of separate Scots law and criminal procedure.

Jonathan Djanogly: I should like to touch on a couple of errors. The first relates to the status of the documents that may be seized or handed over under subsection (1). If they are handed over or seized in respect of a criminal investigation, can they then be used for civil proceedings as well? If a company were willingly to give the OFT confidential information as part of a civil investigation relating to what turns out to be a criminal offence, or for any other reason—perhaps as a market-testing expedition—could that information be used in the criminal trial?
 My other question relates to the fact that in subsection (2)(b) and (c) the documents are referred to as of the ''relevant kind'', but in paragraph (d), which deals with electronic mail, the information concerns 
''relates to any matter relevant to the investigation''.
 So, a different formula of words is used for what seems to be the same thing. I would be interested to hear from the Under-Secretary whether there is any particular reason for that.

Melanie Johnson: As the hon. Member for Orkney and Shetland knows, the Bill proposes that warrants should be granted by the High Courts in England and Wales and in Northern Ireland and by the High Court of Justiciary in Scotland. The objective is to ensure the right level of scrutiny. I hear what has been said about it being the usual business of sheriffs in Scotland to grant warrants for criminal investigations into even the most serious offences. I am grateful for the comments that have been made, and I will consider whether we should revise the clause in that respect. However, I assure the hon. Gentleman that we have liaised extensively with Scottish legal experts and taken their advice.

Alistair Carmichael: Is the Under-Secretary telling the Committee that the Crown Office was consulted and pronounced itself satisfied with the High Court of Justiciary having a warrant-granting power, because I have information to the contrary?
 Miss Johnson: I can only be advised on the matter, but that advice is that the Crown Office was consulted and was content.

Alistair Carmichael: Would the Under-Secretary be prepared to make that information available?

Melanie Johnson: We do not normally make such information available, but I can take further advice on the details of the matter, and I assure the hon. Gentleman that that is the advice that I received.

Mark Field: Is that advice in writing, and could it be made available for Thursday's sitting, so that we could all be satisfied on the matter?

Melanie Johnson: I do not see any reason why hon. Members are taking this line. I have said that I am grateful for the comments that have been made and will consider whether we should revise the clause. We can make a mountain out of a molehill, if Opposition Members wish, but it is not normal to share policy advice.

Alistair Carmichael: I merely want to make clear my concern, which I have already expressed on several occasions, that the Bill takes insufficient account of Scots law and procedure. That is my sole reason for wanting that information to be put in the public domain.

Melanie Johnson: I am listening to the hon. Gentleman, and I am aware of his concerns, which have been noted. For that reason, I am saying that we will consider whether any revision of the clause is necessary. This debate is getting us no further, because we are all reporting what has been said to us about how the arrangements work. I want to turn to the point raised about information collected under the criminal powers. If information is so collected, it can be used for civil investigations, if it has been properly obtained. So, the answer to that question is yes.
 Question put and agreed to. 
 Clause 185 ordered to stand part of the Bill.

Clause 186 - Exercise of powers by authorised person

Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: This clause ties in with clause 185(4), which deals with people who are authorised in a warrant to accompany the named officer who is executing the warrant. I would be interested to hear a little more about how the clause will work in practice and what its purpose is. I know that, under clause 194, the same type of power will be provided in respect of warrants issued under the Competition Act 1998. However, I would be interested to know whether there are any previous examples of such a provision in legislation, and whether any common-law cases have led to the need for the provision. More specifically, could the authorised persons be contracted-out specialists, and if so, will they come from the private or public sectors?

Melanie Johnson: We do not envisage that the power that the clause gives the OFT will be used regularly, but it is important because it allows the OFT to
 involve experts from other agencies and institutions who might be involved in a cartel investigation or aspects of that investigation. Experts might be needed if the offence is committed in a specialised market or involves specialised knowledge on behalf of the investigator, such as specialised financial accountancy or information technology expertise.

Jonathan Djanogly: I would be appreciative if the Under-Secretary defined the use of the word ''institutions''. Would they be purely public sector institutions, or could they be private?

Melanie Johnson: They would be any institution that can provide expertise under an arrangement with the OFT under the powers. However, I expect that it would often be public sector organisations that would have that expertise.
 The clause also allows the OFT to involve officers from the Serious Fraud Office who could aid an investigation. An important safeguard in the clause is that no person is bound to comply unless the authorised person, whoever he or she may be, can produce evidence of his or her authority. In fact, the OFT has said that it would always expect such persons to be from public bodies.

Mark Field: I am slightly concerned about the practical reality. In the early days of the legislation coming into play, it is likely, given the climate of cartel-busting in Europe, that the OFT will be stretched and will have an enormous number of tasks ahead of it. It is possible that as a result it may wish to hive off some of its work to private-practice law firms, for example, which would do some of the basic investigation. Would such an employee be a ''competent person'' for the purposes of the clause, even if he or she were not a public sector official? I should be interested in some guidance on how that will work, given the difficulties that the OFT may face.

Melanie Johnson: My understanding is that such an employee could be a ''competent person'' under certain circumstances, but people's exact backgrounds will not make any difference, because they will all work under OFT control and will be subject to all the safeguards associated with the powers of investigation. As is often the case, someone working for the OFT under such conditions will, to all intents and purposes and in terms of the requirements placed on them, be part of the OFT. That safeguard is in place.

Jonathan Djanogly: With respect, there is a big difference between the public and private sectors, not least in conflicts of interest or previous knowledge. For instance, if a private investigator or institution were used, we would have to ask who they worked for previously as there might be conflicts of interest.

Melanie Johnson: Clearly, it would be unsatisfactory for a conflict of interests to arise. The competition authorities always have to consider who is involved in a matter and whether there are conflicts of interests, as is the case in other fields of life.
 Question put and agreed to. 
 Clause 186 ordered to stand part of the Bill.

Column Number: 208

Clause 187Privileged information etc.

Privileged information etc.

Mark Field: I beg to move amendment No. 107, in page 134, leave out line 43.
 I should like to say a few words on the clause and proposed amendment. Several hon. Members have a legal background and take legal professional privilege for granted. Outsiders are often cynical about the whole idea of professional privilege. I am looking with an eagle eye at the hon. Member for Wolverhampton, North-East, who is chuntering away at the prospects that legal professional privilege brings with it. 
 However, we should remember that professional privilege is not primarily about protecting the lawyer or relevant professional—in subsection (2), the banker—but the interests of the client. Subsection (2) states: 
''A person may not under section 184 or 185 be required to disclose any information or produce any document in respect of which he owes a an obligation of confidence by virtue of carrying on any banking business unless'',
 under paragraph (a) 
''the person to whom the obligation of confidence is owed consents to the disclosure or production'';
 in other words, unless privileged information protection is waived by the person in whose interests the privilege exists. Or, under paragraph (b)—to which we object, so we want the second tenet deleted— 
''the OFT has authorised the making of the requirement.''
 In respect of fairness and due process, it is unjust that the OFT has this power of override. An item of information is privileged and the person whose privilege is protected may be keen for it to remain in confidence, but without the amendment the OFT has full discretion to override it. Will the Under-Secretary explain why, given the draconian powers in other clauses, an OFT override is necessary?

Alistair Carmichael: I share some the concerns of the hon. Member for Cities of London and Westminster. I am pleased that the Bill deals with privilege and it is sensible to extend its compass to include bankers. It is rendered somewhat meaningless, however, by granting the power in the first place and then allowing it to be waived by the person conducting the investigation. Sometimes it might be appropriate to waive banking privilege, but why cannot that be done after some level of prior and conditional scrutiny, perhaps through an application to a judge in chambers explaining why the information should be put into the hands of the investigating authorities? Did the Under-Secretary reflect on that in her preparation for the Bill? Is that not a more suitable avenue to explore?

Melanie Johnson: Can I go back to the origins of banking professional privilege, which lie in the Criminal Justice Act 1987? We used that as a model for the investigatory powers in cartel offences. Section 2 of the 1987 Act confers powers of investigation on the SFO with respect to serious fraud investigations. Since the OFT and SFO will work closely together on cartel investigations, the Government want to ensure that the investigatory powers of the two bodies are
 aligned as closely as possible. Section 2(10) provides for banking professional privilege and section 2(10)(b) provides a director of the SFO with the power to override that privilege. The provision here exactly parallels the 1987 Act.
 Clause 187(2) seeks to replicate the arrangement. The amendment would deny an equivalent power to the OFT, which could seriously hamper investigations. No one would deny that the ability to follow money trails is an important power for a cartel investigator. Corrupt payments can be made to seal cartel deals, and individuals involved in bid-rigging and market-sharing can receive sweeteners and pay-offs. The banking trail is important in all those respects. Evidence of such activity is often crucial to securing a conviction, so the OFT needs access to bank records if they are relevant to an investigation. 
 The Government considered leaving out the banking privilege and the override. In contrast with legal professional privilege, there is no legal requirement to respect banking privilege, but we decided that the OFT board should consider in each case whether banking privilege should be respected. That will provide an additional procedural check before bank records can be accessed, and precisely mirrors the tried and tested process followed by the SFO. 
 I hope that, in the light of my explanations, the hon. Gentleman will withdraw the amendment. If he does not, I shall ask the Committee to oppose it.

Mark Field: On balance, I will withdraw the amendment, but a concern has been highlighted. I am reassured in part that a lot of consideration has gone into the provision and that it was not just added as an override. Clearly, there are distinctions between the 1987 Act and this Bill, not least in relation to the potential powers of the OFT, as we discussed at length earlier. One concern that arose was that the OFT had powers over and above those of an investigator and was much more similar to a prosecutor, which of course relates to the SFO's powers under the 1987 Act and the power to override.
 I am not entirely comfortable with the explanation that we have heard. However, on balance, we probably want to move on at this juncture, so I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Mark Field: I beg to move amendment No. 108, in page 134, line 43, at end
 insert 
'( ) For the purposes of this Part, 'privileged communication' shall have the same meaning as in section 30 of the Competition Act 1998.'.
 The amendment is about good housekeeping as much as anything. Indeed, in the light of the explanation that we heard under the previous group of amendments, I hope that the Under-Secretary will be happy to take this amendment on board on the basis that good housekeeping means that the 1987 Act and this legislation should have parallels. There is also a view that the issue of privileged communication should at least be married up with the Competition 
 Act 1998. It has more in common with the Bill than even the 1987 Act, which introduced the concept of banking privilege. 
 Our proposal is fairly straightforward. The concept of privileged communication should have the same meaning in the clause and the Bill as it does in section 30 of the 1998 Act. That change would avoid inconsistency, and I hope that it is not objectionable to the Under-Secretary.

Melanie Johnson: I should like first to clarify what I think the amendment means. It is designed to align the meaning of the phrase ''privileged communication'' in part 6 of the Bill with the definition of ''privileged communication'' in section 30 of the Competition Act 1998. In fact, the term ''privileged communication'' does not appear in part 6, but I believe that the hon. Gentleman is attempting to align the definitions of information that is subject to legal professional privilege in the Bill and the 1998 Act.
 The investigatory powers and the safeguards for their application are based on the powers conferred on the SFO by the Criminal Justice Act 1987. The provisions relating to the protection of legal professional privilege use different words from those in the 1998 Act but, in principle, the legal effect is the same. 
 OFT and SFO officers will work together on cartel investigations. The Government simply want to ensure that they operate under powers that are as similar as possible, so we want to retain the wording based on the 1987 Act. That is our rationale. In the light of that explanation, which is akin to the one that I gave on an earlier amendment, I hope that the hon. Gentleman will withdraw his amendment.

Mark Field: We will be happy to do so, as we have made our point about the need for consistency. It would be perverse to have two, albeit slightly disparate, tests, given the strong connection between the 1998 Act and the Bill. However, we spent 15 years trying to align banking privilege to the 1987 Act. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Alistair Carmichael: I am delighted that legal professional privilege is in the clause, and that the Government accept that it is important. Will the Under-Secretary explain ''in the High Court'' in subsection (1)? Does it mean that privilege is allowed only in proceedings in the High Court, and not in summary proceedings, which in Scotland would be held in the Sheriff Court? If it does, I was not aware of it.

Melanie Johnson: I am grateful for the hon. Gentleman's question, which I cannot answer at this point. [Interruption.] I may now be able to answer it. The answer is no. Subsection (3)(a) states that the High Court is also the High Court of Justiciary, so in that sense the privilege applies only to the High Court. I hope that that clarifies matters.

Alistair Carmichael: They are as clear as mud. Does ''in the High Court'' mean that legal professional privilege
 attaches to proceedings taken in the High Court of Justiciary, or is it suggested that privilege is somehow different in the High Court of Justiciary? If it is, I was not aware of it.

Melanie Johnson: I will answer the hon. Gentleman's question in writing.
 Question put and agreed to. 
 Clause 187 ordered to stand part of the Bill. 
 Clause 188 ordered to stand part of the Bill.

Clause 189 - Use of statements obtained under competition act 1998

Nigel Waterson: I beg to move amendment No. 109, in page 135, line 22, leave out from '2002' to end of line 26.
 It will be obvious from the wording of the amendment that my comments will be short. Clause 189 deals with the use of statements obtained under the Competition Act 1998. Such statements are obtained in what are in effect civil proceedings, and are used under legislation that introduces some serious criminal sanctions, as we debated at, perhaps, inordinate length. The clause entitles the prosecution to use statements obtained under the Competition Act 1998 if they are inconsistent or contain voluntary admissions. The prohibition on the use of those statements should be wider than it is, as the statements were obtained in civil proceedings and therefore in a more relaxed atmosphere than subsequent criminal proceedings. The CBI supports the amendment. Great care should be taken when evidence in statement form is cross-fertilised from civil proceedings to criminal proceedings, not least because one hopes that the people involved in the civil proceedings will be as open and co-operative as they can be. It is in the interests of the Under-Secretary, the OFT and the relevant authorities to accept the amendment, so that people can be as helpful as they want in giving prior statements in proceedings under the 1998 Act.

Jonathan Djanogly: The clause recognises that there will have been civil proceedings before the criminal proceedings. Should not the OFT have to make up its mind whether to commit to a criminal trial first, and then effectively be stopped if it decides to go down the civil route before the criminal route?

Alistair Carmichael: I am not minded to support the amendment. The entitlement to put a prior inconsistent statement to a witness in the course of evidence-taking is important. That has particular implications in Scottish criminal procedure in as much as it can be adopted in certain circumstances; in any event, it can be used to strike at the witness's credibility. The deletion of the subsections would remove that and I can see no good reason to do so.

Melanie Johnson: The safeguard prevents statements that have been obtained under compulsion in a civil
 investigation under the Competition Act being used against the person who made them for the purpose of prosecuting the new offence. It is common practice in criminal law for persons to lose that protection where they make inconsistent statements or voluntarily provide information. Our approach is entirely consistent with sections 2(8) and (8AA) of the Criminal Justice Act 1987. We therefore resist the amendment. I hope that the hon. Gentleman will withdraw it.

Nigel Waterson: We are all keen to make progress. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 189 ordered to stand part of the Bill.

Clause 190 - Surveillance powers

Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: Is it right to give the chairman of the OFT, who will most likely be a business man selected by the Government, the power to authorise the planting of surveillance equipment in residential or hotel premises or private vehicles? In an earlier debate, the Under-Secretary said that would happen only where it had to be done urgently. One can normally have access to a judge fairly urgently and I do not think that this proposal is appropriate. Why is the use of surveillance not to be authorised by a judge on a case-by-case basis? Is there any precedent for such surveillance powers to be given on this basis or will the Regulation of Investigatory Powers Act 2000 set a new course in that respect?

Mark Field: I have grave concerns about some of the civil liberties implications of this proposal. I hope that it is not simply a matter of the measure being lifted intact from the 1987 Act and plonked into the relevant slot in this Bill. Extensive surveillance powers are being given to the OFT, which is predominantly an investigative as opposed to a prosecution body. The powers seem not only excessive, but possibly unnecessary. I would be interested in having guidance, both to alleviate the concerns expressed by my hon. Friend the Member for Huntingdon and myself, and to give me some idea why the powers are so extensive.

Alistair Carmichael: Like other hon. Members, I have some concerns about granting powers to the chairman of the OFT in such circumstances. The powers are fairly wide ranging, and I would be much happier if I thought that there was some judicial or even ministerial scrutiny that does not appear in the Bill. The clause will amend the Regulation of Investigatory Powers Act 2000. I wish to canvass the Minister on whether it is necessary to amend the Regulation of Investigatory Powers (Scotland) Act 2000, too. Perhaps she can erase my concerns on that point. As I understand it, it is not consistent with the Scottish Act to grant such powers. I am concerned that there might be no scrutiny other than that of the investigatory body.
 Miss Johnson: I am sure that everyone agrees that appropriate surveillance powers are a necessary and effective tool for investigating cartels. The clause amends the Regulation of Investigatory Powers Act 2000 to grant the OFT intrusive surveillance powers in the United Kingdom. With those powers, the chairman may authorise the planting of surveillance devices in residential premises, including hotel accommodation, and in private vehicles. In the chairman's absence, and in an urgent case, a senior OFT officer designated for the purpose may also grant an authorisation.
 We all know that cartels operate under cover. They are difficult to detect and are often set up at clandestine meetings held in neutral territory such as hotels. Few records are kept—although good records were kept in the Christie's and Sotheby's case, but I should imagine that that was a bit unusual. The use of surveillance powers could provide irrefutable evidence in court of participation in cartel activity. It is in the public interest to gain evidence about a cartel and lead a successful prosecution. For example, in the case of a cartel for lysine, an additive widely used in animal feed, the United States authorities obtained video evidence that showed cartel members in hotel rooms concluding their deals. It was decisive evidence in securing convictions for offences committed over four years. 
 The powers are necessarily strong. The intrusive surveillance powers will only be used in the most serious cases and when the OFT has specific information about a meeting from an informant. There are important safeguards. All the safeguards in the Regulation of Investigatory Powers Act 2000 will apply. For authorisation of an application for intrusive surveillance under the 2000 Act, its use must be proportionate to what is sought to be achieved, and it must also meet one of three criteria. The one that will apply for the cartel offence is that the intrusive surveillance is necessary 
''for the purpose of preventing or detecting serious crime''.
 It must be the case that the information could not reasonably be obtained by other means. All applications for authorisations are subject to the scrutiny and approval of surveillance commissioners appointed under the 2000 Act. The clause restricts the purpose for which the OFT can use intrusive surveillance to prevent or detect the cartel's criminal offence. The OFT cannot apply the powers for the purposes of any of its civil investigations. 
 When an authorisation is granted, the OFT intends to outsource the technical deployment of the intrusive surveillance activity to public authorities that already have access to those powers, and practical experience of exercising them. I accept that the powers are strong, but we believe that they are justified, necessary and proportionate. Cartels are secretive arrangements that can be successfully detected and prosecuted only with adequate powers of investigation, so I trust that hon. Members will accept that they are necessary. 
 We do not believe that we need to amend the Scottish equivalent of the Regulation of Investigatory Powers Act. We are taking section 46 of that Act, and 
 the OFT will effectively become a cross-barrier body and will be able to use the powers in the Act in Scotland, too. I hope that that answers all the points made by the hon. Member for Orkney and Shetland. I commend the clause to the Committee. 
 Question put and agreed to. 
 Clause 190 ordered to stand part of the Bill. 
 Clause 191 ordered to stand part of the Bill.

Clause 192 - Offences

Question proposed, That the clause stand part of the Bill.

John Pugh: We have some concerns about the clause that relate closely to its wording. As I said, anyone can be in the frame or drawn into the net of an investigation. I draw hon. Members' attention to subsection (2)(b), which states that anyone who ''recklessly makes a statement'' that is not necessarily false but simply ''misleading'' is ''guilty of an offence''. The clause goes on to state that the offence attracts a two-year prison sentence. That is a serious matter for anyone. What safeguards are built into the process of investigation to ensure that people who make casual or thoughtless observations in the process of investigation, but are not the central focus of the investigation, are not in serious trouble—or at any rate that they are advised of the danger before they get into serious trouble? I understand that people who are suspected of crimes are warned seriously about their behaviour. I do not believe that witnesses usually are. In this case we are dealing with witnesses, or perhaps suppliers, not agents in the cartel.
 My second reservation is that the clause makes it difficult for anyone under investigation to establish negligent loss of a document. Such a thing can happen, and the OFT may deem such a document pertinent to the investigation. If it is thought to have been destroyed or lost, for example, the person who has destroyed or lost it must prove that they had no intention of concealing facts. I understand that it is difficult in law to prove intention. It must be even more difficult to prove that someone did not have an intention when the presumption would be that they did. Are the offences drafted in such a way that we are in danger of catching people who are not really the target of the Bill? Instead of having a robust and effective system of prosecution of cartels, we have something closer to the Spanish inquisition—which, as hon. Members know, no one expects.

Melanie Johnson: I crave your indulgence, Mr. Beard, in relation to amendment No. 142, which was not moved. I believe that it has some merit. [Interruption.] Perversely, hon. Members may feel the opposite. I believe not that there is merit in reducing the period to three years, but that there may be merit in considering a seven-year period. Strong arguments could be advanced for aligning sentences under this clause and under clause 179. I had intended to say that I was grateful to hon. Members for having highlighted the issue, and that I should like to return to it on Report.
 Mr. Waterson: I am grateful for that indication, and I shall try to leave more amendments unmoved in future, if that is to be the reaction. I am delighted. If the hon. Lady wants to return to the matter later, we shall be only too pleased.

Melanie Johnson: I am glad, and I am grateful to the hon. Gentleman for his suggestions about the future conduct of our business.
 The hon. Member for Southport made a point about what the clause seeks to achieve. Again, the clause is modelled on the Criminal Justice Act 1987, and the procedures are in line with that Act. 
 Question put and agreed to. 
 Clause 192 ordered to stand part of the Bill. 
 Clause 193 ordered to stand part of the Bill.

Clause 194 - Powers of entry

Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: We now move on to part 7. I covered many issues relating to the clause in our debate under clause 186 about warrants issued in respect of criminal cartel investigations. I do not want to cover that ground again. However, clause 194 contains the same provisions for warrants issued in civil chapter 1 and chapter 2 investigations, which clearly represents a ratcheting up of the OFT's powers. Why does the Minister feel that that is necessary in the context of civil prohibition investigations?

Melanie Johnson: Under the clause, a warrant issued by a High Court judge may authorise a named officer of the OFT and any other officer of the OFT whom the OFT has authorised in writing—and, indeed, officials of the European Commission, under sections 62 and 63 of the 1998 Act—to enter premises using such force as is reasonably necessary. The warrant also authorises those named in it to search the premises, take copies of documents, take possession of documents and preserve them, and to require explanations of the documents or statements regarding their whereabouts. Information may also be extracted from computer systems.
 Under the Competition Act 1998, it is possible to send officers of the OFT alone on raids to companies. Since that Act came into force, the OFT has experienced a need to authorise people not employed by it to accompany OFT officials on searches under a warrant. Such people are required to provide expertise in fields such as IT, which is unavailable within the OFT but required for the OFT to make full use of the warrant and obtain the information that it requires. 
 The clause would enable warrants to be issued that authorise non-employees of the OFT to accompany and assist OFT officers in a search. The external experts will always be required to work under the direction of the OFT; there is no question of their being able to enter premises without OFT officials.

Jonathan Djanogly: I would appreciate knowing why, after only four years, the Government feel it necessary
 to ratchet up the investigatory powers in the civil context.

Melanie Johnson: Because we believe that it is necessary.

Ken Purchase: That is a very good answer.

Melanie Johnson: I always give very good answers, as my hon. Friend is well aware.
 The power to enter premises under a warrant is an important power, and without it the prohibition regime under the Competition Act 1998 would not be effective. It is important that the OFT can use the warrant to search for the required information without being hindered by a lack of specialist expertise, for example. That is the purpose of the clause. The expert would have to be named on the warrant and approved by the High Court judge issuing the warrant, which is an important safeguard as warrants are not lightly issued by the judiciary. All those factors stack up to ensure that investigations are effective. 
 Question put and agreed to. 
 Clause 194 ordered to stand part of the Bill.

Clause 195 - Disqualification

Jonathan Djanogly: I beg to move amendment No. 115, in page 139, line 13, leave out from 'infringes' to end of line 23 and insert
'an offence under section 179 of the Enterprise Act 2002'.
 The law currently provides for unfit persons to be disqualified from being directors or otherwise involved in the management of limited companies for a certain period without the leave of the court. The clause would extend those provisions to directors of companies who commit a breach of competition law. We debated at some length whether cartel offences should be classed as criminal offences. It was the clear view of Conservative Members that they should not be. However, following the withdrawal of certain amendments it would now be the case that, as with any other criminal offence, the court would have the opportunity to attach a disqualification order at the time of sentencing. That power is not being questioned, although we believe that it would make sense for it to be spelled out in the Bill. That would be part of the effect of amendment No. 115, which would insert the new section 179 cartel offence as a breach of competition law. 
 However, the Bill goes further by extending the definition of breaches of competition law to include chapter 1 and 2 prohibitions and breaches of articles 81 and 82 of the EC treaty. That represents a radical change. None of the prohibitions involves criminal sanctions against directors. They are civil issues, and a company could be fined if it were found to be in breach of them. That might look straightforward, but I do not think that it is—mainly because the concept behind directors disqualification orders is that they are issued on the back of criminal or insolvency sanctions. In other words, if the director were considered unfit, that would be apparent from the underlying case. That is not the situation here; in most cases the underlying action would relate to the conduct of the company as a 
 whole, not to the rights and wrongs of a particular director's actions or lack of them. 
 The way in which disqualification orders work is not through an independent trial of the rights and wrongs of the particular disqualification, but by the orders being attached to other sanctions. As a result, there is a significant chance either that a director could be disqualified for reasons that the law would not otherwise attribute to him or her, or that the period of disqualification arising out of the process could be grossly disproportionate to the individual's offence. 
 Furthermore, the new clause gives no sense of proportionality concerning the extent to which a company might have breached, for example, article 1. These are not black and white issues, and we are not talking about criminal offences. Breaches could be on a large or a small scale. How would that be reflected in the period of disqualification? The amendment reflects those problems, and states that disqualification should relate only to criminal circumstances.

Mark Field: It strikes me that the current wording that would disqualify directors reflects a ham-fisted approach. I can appreciate that if there is a cartel and the Government, understandably, want to ensure not only that full sanctions are put in place to expose that cartel but that there are strong disincentives for future directors to act in that way. However, it seems that most other disqualification orders, particularly those relating to insolvency, do at least attach some personal blame to a particular director. The proposed wording would impose a directors disqualification across the board on all directors of a company that is found guilty of participating in a cartel. That does not seem to be the right way to proceed.
 It is understandable that the full brunt of cartel legislation should be brought to bear on a company, and therefore on individuals in the company who are guilty of the offence. However, to ensure that directors, who may personally have been innocent of any criminality, are disqualified as a result of their being attached to a company that is guilty seems unjust. Such relatively innocent directors would find their careers blighted by their association with such a company in any event. A fully fledged disqualification, even for a relatively short time, from being a director of other companies seems a wholly additional and unjust penalty. I hope that the Minister will give some thought to drawing a distinction between directors of guilty companies who are relatively innocent and those who are guilty.

John Pugh: I would like some clarification from the Minister. I have read the clauses carefully, and the comments made by the hon. Member for Cities of London and Westminster are not quite right. Presumably, two conditions must be met before somebody can be disqualified. First, they must be a director of a company that has committed a breach of competition law, and secondly, the court has to judge them to be unfit.
 There may be some directors of companies that have committed breaches of competition law who will be left alone and not disqualified, because the court regards them as fit to run a company. That is fine, 
 except that it creates the anomaly that a director of a company that has breached competition law can be disqualified whether or not they are personally responsible for that breach, so long as the second condition is met and they are judged unfit. In other words, the director's personal liability is not the issue. The conditions that must be satisfied are that his company has committed a breach and that he is unfit—perhaps on grounds that have nothing to do with his involvement in the breach of competition law.

Melanie Johnson: On a point of order, Mr. Beard. I should draw hon. Members' attention to the letter that I have sent to members of the Committee about the OFT's disqualification guidance, which I am sure they will find useful and helpful in further debate on the matter on Report. I hope that that will give the Committee an opportunity to consider that guidance in more detail.
 First, the amendment would prevent the court from considering whether the director of a company that has committed a breach of competition law falling outside the ambit of the cartel offence was unfit to be involved in the management of a company. The Bill allows the court to disqualify a director who has been convicted of a cartel offence under clause 179. 
 It is right that the court should have the opportunity to consider such cases and disqualify directors where that is appropriate to protect the public. Some 7,607 directors have been disqualified under existing provisions, the vast majority of them for being unfit directors of insolvent companies under the existing arrangements. There was some debate this morning about whether the existing provision was being much used, but that is the figure for the five years from 1996 to 2001. 
 It is important to look at the matter in perspective. The vast majority of companies in business operate responsibly. The disqualification provisions will apply only to the very small minority of directors whose companies have been found to have breached competition law. It will be for the court to decide, on the facts of each particular case, whether the person is fit to be involved in the management of a company. If the court is not satisfied that is the case, it may not make a disqualification order. I believe that we have got the balance right in giving the courts the opportunity to consider the matter, giving the opportunity for disqualification but leaving it up to them to decide. That will make a difference in each case, which is the point of the court's considering the evidence and circumstances in each individual case. 
 I expect that the vast majority of cases will relate to active involvement in a breach of competition law rather than anything else. However, it is right that the court should decide whether there are other circumstances, such as a lack of knowledge, that might be equivalent to an unfitness for a director to continue. I hope that I have reassured Opposition Members about the nature of the clause, and that the amendment will be withdrawn.

Jonathan Djanogly: I thank the Under-Secretary for her explanation. Clearly, it is for the courts to decide whether an order should be attached, but I remain
 unconvinced that it would be appropriate to attach criminal orders to civil judgments. That is mixing and matching in a way that may not work in practice. Having said that, as the matter may be reconsidered in due course I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Sitting suspended. 
 [Continued in column 221]